Pension - higher rate tax relief HMRC

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I have been trying to claim higher rate tax relief off my pension contributions for a few years now. Everytime my salary and, therefore, pension contribution changes I call HMRC to notify and input the correct numbers.

I keep wondering if everything is in order, so I thought I ask here.

HMRC ask me what my annual pension contribution is, and the number I give them is what I actually pay.

Example: I want 7pc of my salary of 100 put into pension. That is 7 - I automatically get tax relief at source for 20pc, so I effectively pay 5.60 and tax relief make up the other 1.40 so I reach my 7pc contribution.

For a whole year that would mean I pay 5.60x12=67.20 and basic rate tax relief is 1.40x12=16.80.

Now, I want to claim higher rate tax relief, so another 20pc. Is it correct that I tell HMRC I pay 67.20 into my pension every year and how are they working out the other 20pc tax relief?

Every time I call I speak to people who just input numbers, so cannot actually explain to me.

If you are employed and salaried, surely this is dealt with via PAYE? Your employer gives the figures to HMRC. Or are you self employed?

This doesn't automatically get done if you're salaried. We reclaim the higher rate too, but do it by filling in a self assessment (also reclaim on gift aid). I'm not aware of the tax man paying it into your pension, I think you just get it adjusted in your tax code or repaid to you. If you want more in your pension you need to pay more in, offsetting the fact you're paying less tax. Thankfully work is moving to salary sacrifice soon so we won't need to reclaim the 20%.

I think if you're in a salary sacrifice scheme you don't need to do anything because the pension cont comes before any tax. If it's not a SS scheme don't you claim it back on a tax return?

Cross posts!

I am salaried and only the 20pc basic rate tax relief is processed automatically. I.e. my 7pc pension contribution of 7 is adjusted automatically so is split into 5.60 I contribute and 1.40 tax relief. This means I don't actually pay 7pc myself but 5.6pc. As a higher rate tax payer you get an addtional 20pc tax relief and I want to know which number this is based on and how I get my money.

I just read that the pension contribution is added to the personal tax free allowance, so I think I got my answer.

Sounds like you’re in relief at source scheme which means 20% relief through payroll.

Dont he confused by suggestions you should get full relief already, that only happens if you’re in a salary sacrifice scheme (where you ALSO benefit from EENI relief!). And you can only do via self assessment if you’re over the self assessment threshold. I’m not, I’ve tried.

Payroll do NOT report the full amount to hmrc in relief at source schemes. Totally normal, albeit annoying.

so I’m in the same position as you and I called hmrc a few months ago, and again yesterday. I’m only doing for prev tax years, and they issue cheques for that rather than tax code adjustment. Once this year ends I’ll call and do reconciliation for this year. And so on every year. I’d rather go on actuals not estimates.

First time I called they asked for my gross and net contributions. I didn’t have it to hand so said I’d call back another time. Yesterday, they only asked for my gross contributions, which I gave them. Guy on the phone said my refund would be approx £2k which is what I was expecting (the second lot of 20% essentially).

however I’ve now had calcs come through overnight to my hmrc app (I recommend getting if you don’t have it). They say my refund is twice what I’m expecting. I’m now worried the guy i spoke to hasn’t accounted for fact I’ve already had basic 20% relief and has put the gross numbers in where it should have been net. ALSO it’s triggered the opposite for year 18/19 and says I owe them tax lol.

so going to call back today to clarify. Fyi I called yesterday at approx 0915 and only had to hold for about 10 mins.

Thanks @Sierra26 . What do you understand under gross and net contribution?

And you can only do via self assessment if you’re over the self assessment threshold.

You definitely CAN do it via self assessment, even if you aren't required to self assess. HMRC may tell you that you aren't required to submit a return, but you can still choose to do so - I have been doing so for several years - and they will accept and process it.

www.gov.uk/tax-on-your-private-pension/pension-tax-relief

I thought there was a basic form you could submit, but a quick Google doesn't show anything and I'm not at work to check.

Net contribution = what you have paid (ie the 80%).
Gross contribution = the full amount with the 20% tax relief added.

If you look at your pension account with your provider you will see this, eg mine says Net £800 Total £1,000.

Perfect, thanks @Chasingsquirrels I did give them the net contribution, so it should be sorted.

Thanks@Chasingsquirrels good explanation re gross and net.

and for your point re self assessment. How do I actually do it if hmrc won’t set me up to do it? I’ve spent so long googling and got nowhere. I thought they had to agree to it first…

Ah, if you've never been in self assessment you need a UTR (unique taxpayer reference) to file.

www.gov.uk/register-for-self-assessment/not-self-employed

Hmm, although that asked you which criteria you fall into. Personally if you WANTED to do an self assessment I'd chose the untaxed income outside PAYE - they'll issue the UTR and once you've got that you will fill in your self assessment correctly and go from there.

BUT then you are in the system, and may have to continue to file self assessments even if you don't want to.

The simpler way is to tell them your pension contributions each year and get the tax back that way.